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GOP’s Health Insurance Overhaul Termed ‘Obamacare light’

March 7, 2017

Will the Affordable Care Act be replaced by the House Republicans’ long-awaited plan, which they’re calling the American Health Care Act?

obamacare overhaul
CCIG’s Scott McGraw

Maybe, maybe not. Hard-right House and Senate Republicans came out in opposition immediately after the plan was unveiled Monday night.

“I think what they’re putting forward is Obamacare light,” Sen. Rand Paul, R-Ky., said.

While they proposed repealing the ACA’s requirement for most Americans to buy health insurance, the centerpiece of their proposal – tax credits that would range from $2,000 to $14,000 – came under heavy fire. Conservatives said the credits amount to a new entitlement program the government cannot afford.

The House Ways and Means Committee also proposed keeping the ACA’s “Cadillac tax” on employers that provide generous coverage.

Business interests have long opposed the 40 percent excise tax, which would be imposed on employers’ plans that cost more than $10,200 for individuals and $27,500 for families. The Republicans’ proposal would keep the tax but delay it until 2025.

On the other hand, in what appeared to be a last-minute concession, most health benefits would continue to be tax-free under the Republican proposal. The health plan that Health and Human Services Secretary Tom Price had introduced when he was in Congress would have capped the amounts that could be excluded from taxes at $8,000 for single coverage and $20,000 for family coverage.

Employers and labor unions have opposed any change in the tax exclusion for workers all along.

Meanwhile, two of the most popular features of Obamacare would be left intact: letting young adults stay on their parents’ health plans until age 26 and forbidding insurers to deny coverage or charge more to people with pre-existing medical problems.

Here’s what else the bill would do:

  • Repeal most of the ACA taxes that pay for the law’s premium subsidies, the expansion of Medicaid and enhancement of Medicare benefit.
  • Eliminate the ACA’s minimum essential benefits.
  • Allow insurers to impose a 30%, one-year premium increase on individuals who buy insurance after letting their coverage lapse.
  • Allow insurers to charge older Americans five times higher premiums than they charge younger people, up from the ACA’s permitted 3 to 1 age differential.

House committees said they planned to begin voting on the 123-page plan Wednesday.

Scott McGraw is Vice President of CCIG’s Employee Benefits division. He can be reached at 720-330-7924 or

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